DOJ Targets ‘Duplicative Penalties’ Through Increased Coordination

Deputy U.S. Attorney General Rod Rosenstein holds a copy of the Constitution at a Washington, D.C., event on May 1.
Photo:
Reuters/Jonathan Ernst

The U.S. Justice Department rolled out on Wednesday a policy to improve coordination among regulators so companies aren't excessively penalized in white-collar cases.

"It is important for us to be aggressive in pursuing wrongdoing," Deputy Attorney General Rod Rosenstein said in remarks prepared for delivery Wednesday to the New York City Bar White Collar Crime Institute on Wednesday. "But we should discourage disproportionate enforcement of laws by multiple authorities."

The Justice Department is better able to detect and tackle financial fraud by working with agencies such as the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Office of Foreign Assets Control, among others, said Mr. Rosenstein.

"We have heard concerns about 'piling on' from our own department personnel," he said in his remarks.

The policy has four elements, will be incorporated into the U.S. Attorneys' Manual but isn't enforceable in court, he said.

First, it bars the use of the federal government's criminal enforcement authority for purposes unrelated to dealing with a potential crime. "We should not employ the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case," he said.

Second, the policy directs lawyers in different parts of the Justice Department dealing with the same misconduct at the same company to coordinate with one another to achieve "an overall equitable result" and avoid "disproportionate punishment."

Third, department lawyers should also coordinate with other U.S. and foreign authorities—a practice Mr. Rosenstein said has become routine at some U.S. Attorney's offices and the fraud section of the department's criminal division.

Finally, the policy lays out factors, such as the seriousness of conduct and legal requirements, Mr. Rosenstein said prosecutors should consider in determining whether multiple penalties are needed.

"Sometimes, penalties that may appear duplicative really are essential to achieve justice and protect the public," Mr. Rosenstein said in his remarks.

Write to Henry Cutter at Henry.Cutter@wsj.com. Follow him on Twitter at @henry_cutter.